Telit Communications PLC (“Telit”, “the Group”, AIM: TCM), a global enabler of the Internet of Things (IoT), has published its results for the six months ended 30 June 2020.
· Group revenues were $166.9 million, down by 7.4% reflecting the impact of COVID-19 (H1 2019: $180.3 million excluding revenue from the automotive division sold in February 2019)
· IoT Cloud & Connectivity revenues were $21.0 million, up by 12.3% (H1 2019: $18.7 million) in line with strategic refocus on industrial IoT services
· Adjusted EBITDA2, increased by 12.5% to $18.0 million (H1 2019: $16.0 million)
· Gross Margin increased to 35.2% (H1 2019: 32.0%) as a result of supply chain optimisation and increasing share of service revenues
· Profit in cash3 increased to $5.9 million (H1 2019: $2.6 million), supported by improved Adjusted EBITDA and management’s disciplined approach to capital expenditure
· Adjusted profit before tax improved to $12.1 million, (H1 2019: $4.0 million); as reported Profit before tax: $9.7 million (H1 2019: $58.1 million including exceptional profit from sale of automotive business)
· Net cash position improved to $56.2 million at 30 June 2020 (31 December 2019: net cash $48.2 million), including improved collection of receivables from Titan
· Continued supply chain improvements with new production facility in Vietnam now fully operational and expected to contribute to further gross margin improvement
· Sustained investment and innovation across product and services with focus on key sector opportunities related to integration, scalability, security and management
· Commercial launch of OneEdge, Telit’s flagship integrated hardware and services IoT solution with roll out to customers underway
· Positive product certification progress in H1 2020 further expanding availability on an international level, including first 5G product addressing demand for high bandwidth products; global certification for NB-IoT and LTE-M modules from major US networks
· Advanced IoT connectivity solution to be launched in H2 2020 following receipt of Mobile Virtual Network Operator (“MVNO”) licence and core network in 2019
 For reconciliation from IFRS financial results to adjusted financial results, see Note 3.
 Adjusted EBITDA is defined as Adjusted EBIT plus depreciation and other amortisation; Adjusted EBIT is defined as Earnings Before Interest, Tax, share based payment expenses, amortisation of acquired intangibles, impairment of intangible assets, exceptional expenses related to restructuring and other exceptional items
 Profit in cash defined as Adjusted EBITDA less development costs capitalised, less capital expenditures, less lease expenses in cash
Paolo Dal Pino, Chief Executive Officer, said:
“Over the past two years Telit has undergone a major transformation and, as demonstrated by our strong performance in H1 2020, is now a business built on strong operational, financial and governance foundations.
As a result of this transformation, Telit is now fully focused on industrial IoT products and services and is deploying an effective strategy using our OneEdge platform that offers both hardware and services solutions.
The COVID-19 pandemic is accelerating the adoption of IoT solutions as a “mission critical” service, mainly due to the increased need to manage assets remotely, which will create medium and long-term benefits for Telit. We are working for the future and 5G will be a game changer in the connected devices industry. Thanks to our position in 4G and fast connectivity devices we are the natural partner for customers investing in 5G-enabled devices.
The evolution of the business has also enabled Telit to respond effectively to COVID-19 by executing a targeted programme of efficiencies to protect both our supply chain and our strategic and financial targets.
We remain confident both that we will be able to deliver full-year profitability in line with the Board’s expectations and that the business is well positioned to create further value for shareholders as markets recover.”